IRS Says No More Free Lunch for Silicon Valley Tech Companies

The Silicon Valley signature perk of lavish lunches and gourmet extravaganzas that tech companies offer employees is being challenged by the IRS.

The federal tax bureau is arguing that the feasts are a taxable fringe benefit and is seeking to collect back taxes amounting up to one-third of the meals’ fair-market value, reported the Silicon Valley Business Journal.

Companies such as Google, Facebook, and Twitter have offered the meals presented by in-house gourmet chefs along with barbershops, dry cleaning services, and private commuting buses – all for the price of zero dollars. These amenities have become an effective recruiting tool and have aided management in the acquisition of strategic talent.

According to the Wall Street Journal, the IRS is making taxing “employer-provided meals,” a strong priority for the upcoming tax year, which ends in June, 2015. The tech companies won’t go down without a fight and will be employing their lawyers to combat the IRS aggressiveness.

Silicon Valley critics suggest that allowing these companies to provide untaxed meals and services gives those businesses an unfair advantage in drawing crucial employees.